Mortgage Arrears Still Involve ‘Extend & Pretend’ According to Brokers Ireland
Tue Jun 23 2020
PRESS RELEASE
Commenting on this week’s Residential Mortgage Arrears & Repossessions from the Central Bank for Q1 2020, Brokers Ireland said while it is positive that long-term arrears are showing signs of improvement they are not what they should be and there is strong evidence of ‘extend and pretend’ particularly in relation to longer term arrears.
Rachel McGovern, Director of Financial Services at the organisation which represents 1,250 Broker firms said accounts in arrears for over 720 days continue to account for 42pc of all accounts in arrears.
“The highest portion of the 81,255 PDH mortgages termed ‘restructured’ involve ‘arrears capitalisation’ whereby outstanding arrears are added to the remaining balance. And there has been little improvement in these figures since the last quarter,” she said.
“There are still almost one in three or 31pc of so-called restructures involving arrears capitalisation. And of these more than one in five, 23pc, are still not meeting the terms of the restructure.
“Effectively that is extending and pretending. It is prolonging the agony which will have to be faced up to at some point,” she said. “However, since non-bank entities now control 55pc of mortgages in arrears over 720 days and 49pc of those in arrears of over 90 days, greater momentum could be anticipated in dealing with the issue. And this, for many, should involve writing down debt to a realistic level.” she said.
